TMI Blog2019 (11) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the Assessee that the Assessee suo-moto has already increased its assessable income for the relevant previous year ended on March 31, 2010 and further the said addition made by the AO tantamount to double addition, which in our opinion, needs to be verified at the level of the AO whether the same tantamount to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. In the result, the Assessee s appeal is partly allowed for statistical purposes. Disallowance on account of Provision for Bad and Doubtful Debts and provision for Arrears of Salary - HELD THAT:- After perusing the computation of income for the AY 2010-11), we note that Assessee suo-moto has already increased its assessable income by reducing its expenditure by an amount of ₹ 4,50,000/- and ₹ 5,00,000/- for the relevant previous year ended on March 31, 2010. Further, the said disallowance made by the AO tantamount to double disallowance, which in our opinion, needs to be verified at the level of the AO whether the same tantamounts to double addition or not and then decide the same afresh, after giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in law and in facts confirming the order of the AO wherein he has denied the exemption U/s 11 of the Act to the Appellant. 4. That the CIT (A) has erred in law in holding that the activities conducted by the Appellant are not in accordance with the objects of the Appellant society. 5. That the CIT (A) has erred in law and in facts in confirming the order of the AO wherein the AO has not allowed the accumulation of income of ₹ 2,25,84,589/- U/s 11(3) of the Act to the Appellant. 6. The Appellant craves leaves to add, alter or modify the aforesaid ground and craves leaves to file additional rounds. 7. The aforesaid grounds are taken without prejudice to each other. 2.1 The Grounds raised in Assessee s ITA No. 3082/Del/2017 (AY 2012-13) read as under:- 1. That in view of the facts and circumstances of the case the order passed by the CIT (A) and the assessment order is illegal, bad in law and without jurisdiction. 2. That the order of the CIT (A) is being assailed of being perverse, as the same is passed without considering the submissions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btful debts and provision for arrear of salary. 2. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in allowing utilization of income u/s. 11(2) expenditure as this account has already been allowed on deemed basis earlier years. 3. On the facts and in the circumstances of the case and in law, the decision of the Ld. CIT(A) is not acceptable as Interest Income and Other Income should be credited in Income and Expenditure A/c as the Assessing Officer has computed income of the assessee on the basis of Income Expenditure account submitted during the assessment proceedings. 4. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in deleting addition as Gratuity expenses claimed in Income and Expenditure A/c as no documentary evidence for actual payment of the expenses was furnished during the assessment proceedings. 5. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing. 2.4 The Grounds raised in Assessee s ITA No. 3658/Del/2018 (AY 2013-14) read as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive of the Trust. 2.4. That the Hon'ble CIT(A) has erred 00 facts and in law by invoking Section 13(8) of the Act and thereby, sustaining an addition amounting to ₹ 7,62,81,269 on account of surplus generated from publication of newspapers. 3. That on the facts and circumstances of the case the Hon'ble CIT(A) has erred in not adjudicating with regard to surplus amounting to ₹ 2,73,83,417; interest and other income of ₹ 3,36,37,911 and agricultural expenses of ₹ 20,22,411. 4. That having regard to the facts and circumstances of the case and in law the Hon'ble CIT(A) has erred in affirming the impugned assessment order wherein it has been wrongly held that, running of newspaper is not incidental to the objects of the appellant and that it is in the nature of business since the assessee itself has submitted audit reports in From 3CB and 3CD and resultantly, on the Hon'ble High Court of Delhi decision on Mehta Charitable Prajnalaya Trust. 5. That having regard to the facts of the case and in law, the Hon'ble CIT(A) has without an independent reasoning of the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been brought on record to show how the activity of running the newspaper business is incidental to the main objectives of the trust. 2.2 That the Hon'ble CIT(A) has erred on facts and in law in denying exemption in terms of Section 11 of the Act basis irrelevant consideration that the activities carried on by the appellant did not aid and assist in accomplishing the main object, to enlist and train national missionaries for the service of motherland. 2.3 That on the facts and circumstances of the case and in law, the Hon'ble CIT(A) has erred in stating, nothing has been brought on record to show how the activity of running the newspaper business is incidental to the main objective of the Trust. 2.4 That on the facts and circumstances of the case and in law, the Hon'ble ClT(A) in complete disregard of the fact that the printing press was instrumental in achieving the objectives of the Trust and keeping alive the motto of Pandit Gopal Banhu Das, has erroneously concluded that the printing press is a business activity not quantifying as a charitable activity. 3. The Hon'ble CIT(A) has erred on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same in computation of income, without appreciating that the AO made the computation of taxable income afresh starting from the surplus shown in income and expenditure income. It is also seen that the provision is in fact provision for leave encashment not allowable under the Income Tax Act. 3. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of ₹ 1,27,33,613/- on the ground that the assessee had itself disallowed the same in computation of income, ignoring the fact that unless the same is claimed as expenditure the assessee would not have disallowed it. 4. The appellant craves leave to add, to alter or amend any ground of appeal raised above at the time of hearing. 2.7 The grounds raised in Revenue s Cross ITA No. 4049/Del/2018 (AY 2014- 15) read as under:- 1. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting ₹ 3,47,18,749/- even though the assessee has shown this amount of ₹ 3,47,18,749/- towards interest income from term deposit of Orissa Branch which has been credited directly in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... publication of newspaper and books. The assessee has shown consumption of newsprint of 7091 MT. Assessee has submitted its audit report under section 12A(b) of the I.T. Act, 1961 for consolidated account and stated in para that Profit or Loss attributable to the purchases and sales made by the society is also merged in the surplus arising in the consolidated accounts dealt with by this report and a separate income and expenditure account in respect of such activities is not attached hereto as required under sub section (4A) of section 11 of section of the I.T. Act, 1961 in view of the Society having been notified u/s 10(23)(c)(iv) for the assessment years 1990-91 to 1992-93 vide notification dated 27.01.1995 and application for similar notification stated to have been made and approval awaited for subsequent years. 3.2 Assessee-society is engaged in printing and publication of newspaper and a show cause notice dated 25.02.2013 was issued fixing the case on 01.03.2013. In response to the show cause notice counsel of the assessee attended the proceedings on 15.03.2013. The assessee has taken plea that the earlier assessment years were made at NIL. Further the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving objects of the advancement of any other object of general public utility end use of business profit for charitable purposes is of no relevance due to amendment in section 2(15) of the Act. 3.4 Evidently the activities of the assessee of running newspaper printing has characteristics and the assessee is generating income from publishing advertisements in its newspapers. In view of the various judgments, the AO held that the assessee falls under the last limb of section 2(15), and hit by this section. Accordingly, provisions of section 13(8) of the Act is applicable and surplus generated of ₹ 6,00,34,647/- from newspaper business is taxed at maximum marginal rate and levy of penalty u/s. 271(1) of the Act also alongwith various other additions mentioned in para no. 13 to 19 of the assessment order dated 15.3.2013 passed u/s.143(3) of the Act. Aggrieved with the assessment order dated 15.3.2013, assessee filed the appeal before the Ld. CIT(A), who vide his impugned order dated 01.3.2017 has partly allowed the appeal of the assessee against which the Assessee as well as Revenue are in cross appeals before the Tribunal. 4. At the time of hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of income for the Assessment Year 2010- 11 placed as Annexure 10) Further, the said addition made by the Ld. AO tantamount to double addition. Ground No.3: Addition of ₹ 2,18,37,525/- on account of interest and other income credited in reserve fund for activities centered at Delhi. The Appellant suo-moto has already increased its assessable income by ₹ 2,18,37,525/- for the relevant previous year ended on March 31, 2010. (refer computation of income for the Assessment Year 2010-11 placed as Annexure 10) Further, the said addition made by the Ld. AO tantamount to double addition. Ground No.4: General in Nature A detailed chart summarizing all the Grounds of Appeal for AY 2010-11 is also enclosed and marked as Annexure 14-16. Assessment Year 2012-13 ITA No. : 3082/ Del/2017 3649/ Del/ 2017 Appellant Appeal: ITA No. 30821 Dell 2017 Ground No.1 and 2: General in Nature Ground No.3 and 4: Addition of ₹ 9,66,08,554 /- on account of surplus generated from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 59/- for the relevant previous year ended on March 31, 2012. (refer computation of income for the Assessment Year 2012-13 placed at Annexure 11) Further, the said addition made by the Ld. AO tantamount to double addition. Ground No.4: Disallowance of ₹ 18,31,216/- on account of Gratuity expense. The details of the payment of gratuity were submitted before the Ld. AO during the assessment proceedings and the said fact has also been accepted by the Hon'ble CIT(A) at Para l1(v), Page 6 of her order. Ground No.5: General in Nature. A detailed chart summarizing all the Grounds of Appeal for AY 2012-13 is also enclosed and marked as Annexure 17 -20. Assessment Year : 2013-14 ITA No. : 3658/ Del/ 2018 4207/ Del/ 2018 (Cross Appeals) Appellant's Appeal: ITA No. 3658/Del/2018 Ground No.1, 2, 4 and 5: Addition of ₹ 7,62,81,269/- on account of surplus generated from the activity of publishing of Newspaper. The said issue is covered in favour of the Appellant by the Hon'ble Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome for the Assessment Year 2013-14 placed at Annexure 12) Further, the said disallowance(s) made by the Ld. AO tantamount to double disallowance. Ground No.2: Addition of ₹ 1,27,33,613/- on account of Accumulation of income under section 11(2) of the Act. The Appellant suo-mota has already increased its assessable income by ₹ 1,27,33,613/- for the relevant previous year ended on March 31, 2013. (refer computation of income for the Assessment Year 2013-14 placed at Annexure 12) Further, the said addition made by the Ld. AO tantamount to double addition. A detailed chart summarizing all the Grounds of Appeal for AY 2013-14 is also enclosed and marked as Annexure 21 - 23. Assessment Year : : 2014-15 ITA No. : 3658/ Del/ 2018 4049/ Del/ 2018 (Cross Appeals) Appellant's Appeal: ITA No. 3658/ Del/ 2018 Ground no. 1 to 6: Addition of ₹ 2,45,86,358/- on account of surplus generated from the activity of publishing of Newspaper. The said issue is covered in favour of the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, the said addition made by the Ld. AO tantamount to double addition. Ground No.3: General in Nature A detailed chart summarizing all the Grounds of Appeal for AY 2013-14 is also enclosed and marked as Annexure 24 -25. Kindly take the above on record. Prayed Accordingly 4.1 In addition to aforesaid Written Submissions, Ld. Counsel for the assessee submitted that as regards the activity of publishing of news paper has been declared as Charitable vide ITAT, Delhi A Bench vide order dated 17.09.2019 passed in assessee s own case for the assessment year 2011-12 in ITA No. 4984/Del/2015 ACIT(E) vs. Servants of People Society, a copy thereof is filed by him before the Bench. Hence, he requested to respectfully follow the same precedent in all these appeals and similar addition may be deleted. As regards other additions mentioned in the Written Submissions of the Assessee, he stated that assessee has suo-moto has already increased its assessable income and inspite of that the AO has made the addition, which tantamount to double addition. Hence, he requested that this issue involve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Chennai-Trib.). 6. We have heard both the parties and carefully perused and considered the relevant records, the impugned orders, Paper Books filed by the assessee, Written Submissions filed from both the sides and the case laws relied therein. Assessee s Appeal No. 3081/ Del/2017 (AY 2010-11) 6.1 We find that Ground No.1 and 2 in Assessee s appeal are general in nature, hence, need not be adjudicated. 6.2 As regards Ground No.3 and 4 which is relating to Addition of ₹ 6,00,34,647 /- on account of surplus generated from the activity of publishing of Newspaper. We find that the said issue is squarely covered by the Order of this Bench dated 17.9.2019 passed in assessee s own case for the assessment year 2011-12 in ITA No. 4984/Del/2015 ACIT(E) vs. Servants of People Society wherein the Tribunal has held as under:- 5. We have heard both the parties and perused the records especially the impugned order, Paper Book filed by the Assessee and the case laws relied therein as well as the relevant provisions of the Act on the issue in dispute. We find considerable cogency in the contention of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- on account of income deemed under the provisions of Section 11 (3) of the Act is concerned, after perusing the computation of income for the Assessment Year 2010-11 placed in Paper Book, we find considerable cogency in the contention of the Ld. Counsel for the Assessee that the Assessee suo-moto has already increased its assessable income by ₹ 2,25,85,589/- for the relevant previous year ended on March 31, 2010 and further the said addition made by the AO tantamount to double addition, which in our opinion, needs to be verified at the level of the AO whether the same tantamount to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. In the result, the Assessee s appeal is partly allowed for statistical purposes. Assessee s Appeal No. 3082/ Del/2017 (AY 2012-13) 6.4 Following the consistent view as taken in ITA No. 3081/Del/2017 (AY 2010-11), as aforesaid, the ITA no. 3082/Del/2017 (AY 2012-13) is also partly allowed for statistical purposes, being the issues involved therein are exactly similar and common to the issues raised in ITA No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue s Appeal stands allowed for statistical purposes. Revenue s Cross Appeal : ITA No. 3649/Del/2017 (AY 2012-13) 7.3 Following the consistent view as taken in ITA No. 3648/Del/2017 (AY 2010-11), as aforesaid, the ground no. 1, 2 3 raised in ITA no. 3649/Del/2017 (AY 2012-13) are also set aside to the AO with the similar directions, as aforesaid, being the ground no. 1, 2, 3 are exactly similar and common to the ground no. 1, 2, 3 raised in ITA No. 3648/Del/2017 (AY 2010- 11). 7.4 As regards, ground no. 4 relating to disallowance of ₹ 18,31,216/- on account of Gratuity expense is concerned, we find that the details of payment of gratuity were submitted before the AO during the assessment proceedings and the said fact has also been accepted by the Ld. CIT(A) at para 11(v) Page 6 of her order, which does not need any interference, on our part, hence, we uphold the same and reject the ground no. 4 of the Revenue. In the result, the Revenue s Appeal is partly allowed for statistical purposes. Assessee s ITA No. : 3658/Del/ 2018 (AY 2013-14) 8. As regards Ground No.1, 2, 4 and 5 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e past and accordingly following the principle of consistency the AO was rightly directed to allow the exemption to the assessee u/s. 11(1) of the Act with all the consequential benefits by the Ld. CIT(A). Hence, we do not find any infirmity in the order of the Ld. CIT(A), therefore, we uphold the same and reject the grounds raised by the Revenue and accordingly, dismiss the appeal filed by the Revenue. 8.1 Respectfully following the precedent, as aforesaid, the additions in dispute are hereby deleted and accordingly, the ground no. 1, 2, 4 5 are allowed. 8.2 As regards Ground No.3 relating to Addition of ₹ 2,73,83,417/- on account of surplus generated from activities centered at Delhi ₹ 3,36,37,911/- on account of Interest and other income credited in reserve fund for activities centered at Delhi and disallowance of farm expenses of ₹ 20,22,411/- are concerned, we find that addition of ₹ 2,73,83,417/- on account of surplus generated from activities centered at Delhi, the this issue is squarely covered in favour of the Assessee by the decision of the Tribunal dated September 17, 2019 passed in the Appellant own's c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. 9.1 As regards ground 2 relating to Addition of ₹ 1,27,33,613/- on account of Accumulation of income under section 11(2) of the Act. The Assessee suomoto has already increased its assessable income by ₹ 1,27,33,613/- for the relevant previous year ended on March 31, 2013. Further, the said addition made by the Ld. AO tantamount to double addition, which in our opinion, needs to be verified at the level of the AO whether the same tantamount to double addition or not and then decide the same afresh, after giving adequate opportunity of being heard to the assessee. We hold and direct accordingly. In the result, the Revenue s appeal is allowed for statistical purposes. Departmental Appeal: ITA No. 4049/ Del/ 2018 (AY 2014-15) 10. As regards Ground No. 1 and 2 relating to Addition on account of Interest and Other Income amounting to ₹ 3,47,18,749/- credited in reserve fund. We note that the Assessee suo-moto has already increased its assessable income by ₹ 3,47,18,749/- for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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